Mary Jo Taylor highlighted in Baltimore Business Journal article

CFG Community Bank targets developers due to rise in multifamilies

Date: Friday, October 12, 2012, 6:00am EDT Gary Haber Staff Reporter- Baltimore Business Journal

CFG Community Bank is looking to become a major player in the multibillion-dollar market of lending money to owners and developers of apartment buildings.

The Baltimore County bank, one of the largest headquartered in the Baltimore area, has launched a program to finance multifamily construction and acquisitions and refinance existing loans. It hired Mary Jo Taylor, a veteran commercial lender in the Baltimore area, to run the program, which is run through CFG’s Capital Funding unit. Taylor has already lined up 25 deals worth a total of almost $200 million since the program launched in June. “We have quite a few in the pipeline right now,” said Taylor, who was previously senior vice president for commercial lending at Northwest Savings Bank in Owings Mills. She is looking to do deals of at least $5 million not just in Greater Baltimore but nationally.

Apartments are a hot commodity in Greater Baltimore, with a flurry of buildings being bought and sold in the past few months alone and demand from renters on the rise. That is keeping multifamily lenders busy, including CFG’s competitors like M&T and PNC and non-bank lenders like Beech Street Capital, and Walker & Dunlop, both based in Bethesda.

Tighter bank lending standards and higher down payment requirements have locked some would-be home buyers out of the market. Others, shaken by the drop in home values, are opting to rent rather than buy until they are convinced the housing market has bottomed out. High levels of student loan debt have also kept some 20- and 30-somethings from being able to come up with the money for a mortgage.

The apartment vacancy rate nationally stood at 4.7 percent in the second quarter of 2012, according to Marcus & Millichap Real Estate Investment Services. That was down from 5.9 percent in second-quarter 2011. The Baltimore area is even tighter with a vacancy rate of 3.8 percent in second quarter 2012, compared with 4.6 percent the year before. Baltimore is a solid market for apartment construction. Demand remains constant and there is a steady stream of young people looking for apartments, said William Roohan, vice chairman of CBRE, a national commercial real estate firm with an office in Baltimore. “It’s a very steady market,” Roohan said.

The increased demand for apartments has caused developers to move forward with apartment projects. Greenbelt’s Bozzuto Group, for example, has more than 2,400 apartment units under construction worth a combined $650 million. The projects are in Pennsylvania, Maryland, Virginia, and Washington D.C. They include the 281-unit Union Wharf in Fells Point, which is expected to open in fall 2013, and apartment projects at Waugh Chapel in Anne Arundel County and in Annapolis and Odenton.

The new construction is fueling a demand for financing. The value of multifamily loans jumped 60 percent from 2010 to 2011, according to the Mortgage Bankers Association. As for CFG, it is underwriting and servicing loans under two programs of the U.S. Department of Housing and Urban Development. HUD provides the funding, and CFG’s role is to underwrite the loans, process the paperwork and service the loans once they are completed, for which it collects a fee. Its Capital Funding unit is already a large lender of HUD loans to skilled nursing facilities and assisted living facilities.

CFG is the eighth-largest bank based in the Baltimore area, with $468.8 million in assets.